Presented to the First International Graduate Student

Retreat for Comparative Research, UCLA, May 1999

By Zulema Valdez

Foreign and US born Korean and Mexican men have assimilated into the Los Angeles economy in very different ways, with Koreans perceived as an upwardly mobile "middleman minority" and Mexicans perceived as a secondary sector, low-wage labor pool. This paper investigates the question, "Do self-employment rates of US born and foreign-born ethnic groups converge to the rates of the dominant cultural group in the US, as assimilation theory would predict?" Using 1990 Census of Population and Housing, I compare the variation in self-employment participation rates among Koreans and Mexicans as compared to whites, and among immigrants -- as length of residence and age increases in the US. The assimilation and ethnic entrepreneurship literatures are used as a framework for this paper. Assimilation theory predicts that the self-employment rates of immigrants as length of residence increases, and their descendants, should show convergence with self-employment rates of the dominant cultural group -- whites. Findings indicate evidence in favor of the assimilation perspective. US born Korean self-employment rates do not differ markedly from whites, as assimilation theory would predict, while foreign-born Korean, and foreign and US born Mexican men do. Considering the foreign-born as length of residence increases, assimilation theory would suggest a gradual change in self-employment rates. Entrepreneurship proves more important for Korean immigrants upon arrival, and over time the self-employment rates of foreign-born Koreans decrease. In addition, the findings indicate that Mexican self-employment rates are very low at the outset yet show a steady increase as length of residence in the US increases, as assimilation theory would predict. A discussion follows which addresses the limitations of assimilation theory and the introduction of the ethnic entrepreneurship literature to contextualize the specific findings in this paper.

Most scholars of ethnic self-employment, loosely defined in the literature as a member of an ethnic/immigrant group who owns a business, suggest the ethnic group contributes to the likelihood of entrepreneurship by providing specific resources and opportunities that facilitate entry (Light, 1972; Light and Bonacich, 1988; Portes and Bach, 1985; Portes and Rumbaut, 1990; Portes and Zhou, 1992; Waldinger et al., 1990). Social scientists concerned with immigrant adaptation argue that the maintenance of intra-group relations and characteristics in the host country hold the key for understanding this economic activity, which they explicitly or implicitly situate within the larger economic structure of an ethnic economy (Portes and Zhou, 1992; Bonacich and Modell, 1980; Light et al., 1992; Light et al., 1993; Waldinger et al.,1990).

An ethnic economy consists of business owners and employees of the same ethnicity (Bonacich and Modell, 1980; Light et al., 1992; Light et al., 1993). Blocked mobility and limited opportunities in the labor market, coupled with unequal returns on human capital investments are some reasons scholars give for the formation of ethnic economies and entrepreneurship (Sanders and Nee, 1987; Portes and Zhou, 1992). The ethnic economy is understood in two ways. Some scholars suggest that the general economy is made up of the primary and secondary labor markets. While the primary market consists of good-paying, "white collar" jobs that reward human capital, with room for advancement and promotion, the secondary labor market is understood as part-time, seasonal, and low-wage employment with limited advancement opportunities. Some scholars situate the ethnic economy in the secondary market (Borjas, 1990), immigrant entrepreneurs are business-owners participating in risky business ventures of limited capital, growth, and appeal. Other scholars explain the ethnic economy as existing alongside or as an alternative to the general labor market (Portes and Zhou, 1993:87; Light and Bonacich, 1988; Waldinger, 1992; Bonacich and Modell, 1980). Included is the more spatially concentrated ethnic enclave (Light and Bonacich, 1988; Portes and Bach, 1985; Portes and Zhou, 1992; Portes and Zhou, 1993) as well as businesses owned outside the entrepreneur's ethnic neighborhood, such as those owned and operated by middlemen minorities (Light and Bonacich, 1988). As Light, Sabagh, Bozorgmehr, and Der-Martirosian (1994) argue, the term ethnic economy is a more general concept of ethnic business ownership that includes the more specific ethnic enclave, business owners and their co-ethnic employees, and the self-employed business-owner (with no employees). In this explanation, business-ownership is not assumed to be a "survival-strategy" by immigrants; rather, for these scholars, it may provide an avenue of economic mobility.

Given these two competing definitions, the majority of discourse on the ethnic economy concentrates on two issues: first, on whether it has better or worse economic returns than those found in the general labor market, and secondly, the degree to which economic isolation in the form of the ethnic economy, whether existing within the secondary labor market or external to it, hinders mobility, in that it impedes "straight-line" assimilation.

Portes and Bach (1985) suggest that the spatially concentrated immigrant enclave economy among Cubans in Miami provides an equal if not better economic opportunity for immigrant entrepreneurs and their employees when compared to wages of workers in the secondary sector of the general labor market. Further, they contrast the "success" of Cuban entrepreneuship with that of Mexicans, who they argue do not have an ethnic enclave economy and as a result, are relegated to the secondary sector of the general economy. Portes and Zhou (1996) are cautiously optomistic in their findings of earnings among self-employed immigrants in their study. Sanders and Nee (1987) find that self-employed immigrants fare better within an ethnic enclave than outside it, by studying relative wages of immigrants in three distinct ethnic economies. Their results show that earnings of immigrants (workers) in the enclave are less than earnings in the general labor market. However, they found that self-employed immigrants received higher returns on their human capital relative to wage earners in the secondary sector of the general economy. Finally, Borjas (1990) found no differences between the immigrant-owned business sector and the general labor market, and argues that ethnic entrepreneurship does not lead to socio-economic mobility. Although he found the self-employed to have higher incomes in the ethnic economy, this was explained as the result of higher levels of human capital.

Scholars question the benefits and detriments for those groups that engage in ethnic enterprise within an ethnic economy, with respect to returns for workers and owners and in their capacity to eventually incorporate into the mainstream economy and society. Economic benefits diverge based on their definitions of the ethnic economy and the general economy. As for the question of assimilation, scholars argue that incorporation into the mainstream is itself limited by the necessary contribution of ethnic characteristics and resources that contribute to the successful practice of the activity (Alba, 1998). Hence, "incorporation" in terms of assimilation, is not complete, necessary or perhaps even desirable, given the sometimes positive effects attributed to ethnic-oriented characteristics on an immigrant group's economic activity. The assumption that immigrant entrepreneurs represent a group who's economic activity (and success) may be determined by pertinent ethnic characteristics, when brought to it's logical conclusion -- is that ethnic entrepreneurship limits assimilation to mainstream society (Sanders and Nee, 1987).

While scholars find self-employment returns to vary dramatically, based on their definition of an ethnic economy, they agree that "straight-line" assimilation is hindered by this economic activity (again, although they disagree as to whether the implications are positive or negative with respect to economic mobility). In this debate, business-ownership is readily relegated as somehow external to the market, and is not itself used as an indicator of economic incorporation -- as one way to integrate into the US economy. For most, variables used to capture the effects of assimilation originate from the labor market, while the category of self-employment is overlooked. For instance, Alba states "socioeconomic assimilation in my definition is minority participation in institutions such as the labor market and education on the basis of parity with native groups of similar backgrounds"; likewise Warner and Srole (1944) include the effects of occupation, education, and earnings on assimilation. The literature does not consider self-employment participation as a potential indicator of assimilation itself.

Specifically, I suggest that the category of self-employed can be used as an indicator of socio-economic assimilation (Alba, 1998), often defined as educational attainment and occupation within the labor market only. Many different aspects of assimilation have been used to investigate ethnic group differences including: intermarriage, language acquisition, residential location, occupation, and educational attainment (Lieberson, 1963; Borjas, 1990). In this paper, self-employment rates will be used as an indicator of socio-economic assimilation among foreign and US born Korean and Mexican men in Los Angeles, as compared to US born whites. While ethnic characteristics may or may not contribute to ethnic enterprise, the assumption made by scholars that this economic activity is somehow connected to group processes, may be premature or as others have argued, overstated (Alba, 1998; Aldrich and Waldinger, 1990; Light and Karageorgis, 1994). A perspective that compares rates of immigrant/ethnic self-employment rates, regardless of their position within the ethnic economy, with those of the dominant cultural group (in this paper, US born whites) may clarify the possible contributions of each.

Assimilation, loosely defined, refers to the process by which immigrants and their

children accumulate skills and knowledge of the dominant cultural group -- in the United States this group is the US born-white population -- and gradually converge towards greater "homogeneity" (Lieberson, 1963:8). According to this perspective, immigrants gradually integrate into American society and adopt American culture in many respects; by learning English, becoming naturalized citizens, or accumulating occupational skills necessary for economic integration (Lieberson, 1963; Borjas, 1990; Portes and Rumbaut, 1990; Portes and Zhou, 1993). Assimilation cannot be explained in static terms, rather, it can only be understood as a gradual process, observable over time among immigrants and the US born. While assimilation has come under attack of late, it remains a useful term to explain immigrant integration and incorporation experienced across generations, groups, and individuals (Alba, 1998: 827). Immigrants and their descendants will eventually integrate into American society with respect to a wide range of characteristics, and although the outcome may not necessarily be to the homogenous, "melting pot" associated with past notions of "straight-line" assimilation, the process and degree to which this occurs is what the concept of assimilation can capture.

Inferring from the assimilation perspective, self-employment rates of ethnic groups should converge (to some degree) to rates of whites, the dominant cultural group in the US. Although various ethnic groups differ in their self-employment rates, the question I pose is whether convergence occurs, and to what degree. One hypothesis is that the self-employment rate of US born ethnics should be closer to that of whites than the foreign-born. Moreover, as length of residence increases for the foreign-born, rates of self-employment should change in favor of rates closer to that of whites, if the "straight-line" assimilation perspective is correct.

Ethnic entrepreneurship scholars have questioned the assimilation literature for its failure to explain the success of ethnic entrepreneurship, such as the Cuban ethnic enclave economy in Miami, arguably a socially and culturally isolated ethnic enclave, yet an economically viable alternative to the general labor market(Portes and Bach, 1985; Sanders and Nee, 1987). Although the ethnic economy literature has been posed as an alternative to assimilation theory, the ethnic economy literature has not considered whether rates of self-employment for ethnic immigrant groups converge with the dominant cultural group. The assimilation model may provide a framework to discuss the changing rates of self-employment for US born ethnic groups, and as immigrants reside in the US longer. Comparing US and foreign-born rates of self-employment to whites and comparing the foreign-born as time in the US increases with the inclusion of human capital and other influential variables will begin to address this question. If assimilation theory is correct, differences in self-employment rates should be smaller among US born ethnics than the foreign-born (with respect to whites). Additionally, the self-employment rates of the foreign-born should show a small, gradual change as time in the US increases, providing a glimpse of assimilation in progress.

The assimilation and ethnic entrepreneurship perspectives explain foreign and US born self-employment differently. Assimilation theory predicts that immigrants and their descendants will acquire social and cultural knowledge over time which contributes to self-employment outcomes approaching that of whites. In contrast, the ethnic entrepreneurship literature specifies persisting differences in cultural, structural, and social dimensions of ethnic groups contributing to ethnic differences in self-employment, such as an ethnic enclaves and ethnic economies which co-exist alongside the general labor-market. The ethnic entrepreneurship literature considers an alternative explanation of US born and foreign-born ethnic self-employment.

In sum, this paper is an attempt to accomplish three tasks:

1. While social scientists consider the effect of education, earnings, and occupation (Warner and Srole, 1945; Alba, 1998), on socio-economic assimilation, the emphasis on the labor market by economists and social scientists has had the unintended consequence of omitting self-employment. In this paper, self-employment rates are used as a direct indicator of socio-economic assimilation.

2. Explanations of ethnic entrepreneurship that rely on inherent "ethnic" characteristics has directed the focus of this economic activity as outside or external to integration. Ethnic entrepreneurship therefore, is described as one process of limiting or stunting integration into the general labor market specifically, and assimilation more generally. In this paper, entrepreneurial activity will not be assumed to be different because it is engaged in by members of an ethnic or immigrant group, and as such, will be used to measure integration in the economy.

3. Scholars speak of ethnic entrepreneurship in terms of the group, group processes are an integral component of the ethnic entrepreneurship literature rather than individual-level characteristics, and is often situated within an ethnic economy or ethnic enclave. Resources are attributed to group effects, without considering individual level experiences. In this paper, participation in entrepreneurship will be examined from the standpoint of the individual.

The ethnic economy literature often neglects to consider those groups that are not highly entrepreneurial. As Butler notes, "Chinese and Korean enterprises have been studied in detail, but when Afro-Americans engage in business activities, their enterprises are called a myth by scholars(1991: 329)". To illustrate, the current general labor market literature suggests the economic position of Mexican immigrants in the US is "fixed" in the secondary sector of the economy because Mexicans "do not have an ethnic economy", nor do they have the skills and education necessary to enter the primary labor market and advance their position in the general economy (Portes and Zhou, 1992: 495; Portes and Bach, 1985). Cursory explanations specific to the absence of entrepreneurship for certain groups range from individual or cultural shortcomings such as a lack of human capital or the breakdown of the ethnic community. However, these explanations fail to account for small levels of entrepreneurship that exists for many immigrant groups.

On average, Mexicans have low levels of human capital and face discrimination in the general economy and unequal returns on their human capital investments. Low levels of human capital limit may entry into self-employment, as only 5.6% of Mexican immigrants in greater Los Angeles are self-employed, below the average rate of self-employment for immigrant groups in the US (Waldinger, 1990). In contrast, Korean immigrants come to this country with high levels of education, professional and managerial experience, and class resources (Light, 1972; Light and Bonacich, 1988). High levels of human capital endow Koreans with the knowledge and skills necessary to organize businesses. Koreans enter into self-employment in numbers that greatly exceed that of Mexicans and most other immigrant groups (Light and Bonacich, 1988; Waldinger, 1990). Therefore, if self-employment is used as an indicator of assimilation, self-employment rates among foreign-born Koreans should decrease as length of residence increases, while rates among Mexicans should increase.

Further, An individual or group's human capital attainment contributes to the likelihood of successful ethnic entrepreneurship in the ethnic economy and an increase in self-employment among those groups with high levels human capital(Sanders and Nee, 1987). The acquisition of skills and knowledge gives immigrants an advantage in starting a business in the receiving country (Sanders and Nee, 1995). Thus, human capital may increase self-employment. Education, ability to speak English, and age are included in the analysis, because the acquisition of skills and knowledge important to the host society increases self-employment outcomes among ethnic groups.

Light and Bonacich (1988) suggest that ethnic resources play an important role in ethnic self-employment. Ethnic resources refer to cultural values and attitudes as well as co-ethnic social networks, and specific ethnic-group features and identities that business owners use to facilitate entrepreneurship. Light and Bonacich have noted the importance of married status in contributing to Korean self-employment, an ethnic resource, so this variable is included in this analysis.

I focus on self-employment as a measure of assimilation and also consider important variables such as education, language proficiency, married status and age, variables which the ethnic entrepreneurship literature suggests is important in influencing self-employment outcomes. Variations in self-employment rates among ethnic groups that persist after controlling for length of residence in the US, human capital variables and married status may be explained by group specific traits, characteristics that differ between ethnic groups which the ethnic entrepreneurship literature highlights.

This paper investigates of the self-employment patterns of Koreans and Mexicans in Los Angeles. Korean and Mexican immigrants have been incorporated into the Los Angeles economy in different ways. Researchers perceive Koreans as an upwardly mobile "middleman minority" and Mexicans as a secondary sector, low-wage labor pool (Portes and Bach, 1985; Light and Bonacich, 1988). The ability of Koreans to enter self-employment as an alternative to the general labor market and the lack of self-employment among Mexicans is often used to explain differences in the economic success of these two groups (Portes and Bach, 1985; Light and Bonacich, 1988). However, Mexican self-employment has not been studied in detail. In this paper, I attempt to further the research on ethnic self-employment, by comparing one highly successful entrepreneurial group with a group which remains marginally self-employed.

The long history of immigrant settlement in Los Angeles provides an excellent opportunity to consider assimilation processes of US born and foreign-born Koreans and Mexicans, with respect to self-employment. The Immigration Act of 1965 lowered strict immigration constraints and resulted in the growth of Latinos and Asians in Los Angeles from all over the world. From 1970 to 1990, the foreign and US born Mexican population in Los Angeles rose from 1 to 3.6 million persons. The Asian population grew from 198,000 to 954,000 during this time. By 1991, over 40 percent of Latinos and Asians in Southern California were foreign-born (Light and Bhachu, 1993). While this is partly due to immigration policy reform, many Mexican immigrants are also undocumented. Thus, the composition of the two immigrant groups is very different. Koreans are skilled in technological, professional, and managerial occupations, and plan on residing permanently in the US (Light and Bonacich, 1988). In contrast, the US-Mexico border historically has been typified as a "revolving door", as many immigrants in the past sojourned to the US to work in seasonal agricultural jobs which has resulted in a precedent for target earners to come with the intention of returning to Mexico. This sojourning pattern has historical roots, as Mexican laborers have been used as a cheap and exploitable source of labor -- encouraged by US policy towards Mexican immigration (Sanchez, 1987). This flow is actively sought for manual, low or no skilled work at a low wage price. Temporary settlers often work in these types of jobs where advancement is impossible. Any job that pays better than the country of origin is acceptable because it is temporary, regardless of whether it is a "dead end" job. Both groups, however, come for economic reasons.

On average, Mexicans have low levels of human capital and face discrimination in the general economy and unequal returns on their human capital investments. Low levels of human capital limit may entry into self-employment, as only 5.6% of Mexican immigrants in greater Los Angeles are self-employed, below the average rate of self-employment for immigrant groups in the US (Waldinger, 1990). In contrast, Korean immigrants come to this country with high levels of education, professional and managerial experience, and class resources (Light, 1972; Light and Bonacich, 1988). High levels of human capital endow Koreans with the knowledge and skills necessary to organize businesses. Koreans enter into self-employment in numbers that greatly exceed that of Mexicans and most other immigrant groups (Light and Bonacich, 1988; Waldinger, 1990). The settlement patterns of these two groups are similar, they come to Los Angeles in large numbers and come largely for economic reasons, yet experience very different self-employment participation rates. Much of the literature explains differences as based on the ethnic characteristics of the groups. A consideration of these two ethnic groups makes an interesting comparison with regard to the question of economic integration and assimilation.

The data used for this research paper come from the Census of Population and Housing 1990 Public Use Microdata Sample (US Census, 1990), which represents a 5% subsample of the census. An extract of this sample was used, containing specific information on employed US born and foreign born Korean and Mexican men and US born white men. The sample is limited to greater Los Angeles including the five counties of: Los Angeles, San Bernardino, Orange, Ventura, and Riverside. Greater Los Angeles provides an historically immigrant-rich area, with a variety of urban settings to capture much of the variation between and among Koreans and Mexicans residing in Los Angeles. Inhabitants from Koreatown and East Los Angeles, as well as the suburbs of Orange county and the San Fernando Valley are represented in this sample.

Since much of the previous literature on immigrant self-employment has focused on men and since there are large gender differences in the self-employment process, I limit the analysis in this paper to men (Chiswick, 1974; Portes and Bach, 1985; Borjas, 1990). The sample is further limited to employed persons only, and to men of working age, 25-64 years old and among immigrants who entered the US between 1960 and 1990.

First, I compare the self-employment of US born and foreign-born Korean and Mexican men, to White men (the reference group). Next, I conduct additional analysis among immigrant men by examining the effect of length of residence in the US on self-employment.

The effects of nativity on self-employment is examined with a logistic regression analysis of foreign and US born Korean and Mexican men, with White men serving as the reference group. Assimilation theory would predict that US born rates of self-employment should be closer to that of White rates than the foreign-born. By comparing rates of self-employment among the US born and foreign-born with that of whites, gradual convergence of self-employment rates can be observed. The dependent variable in this analysis is self-employment, coded as "1" if self-employed and "0" if not self-employed. Given the dichotomous nature of the dependent variable, logistic regression is used. In Model 1, the effects of ethnicity on self-employment are explored with a comparison of foreign and US born Korean and Mexican men to that of whites.

Control variables consisting of human capital variables along with married status and age are added in the analysis in Model 2. Human capital variables are included in the analysis since Mexicans and Koreans are known to differ along these characteristics, and may contribute to the likelihood of self-employment. According to assimilation theory's prediction, skills and knowledge important to the host society such as education and English proficiency should be positively associated with self-employment. Education is defined as a categorical variable in a series of dummy variables for the categories of 9 to 11 years, 12 years, 1 to 4 years of college, and graduate/professional, with 0 through 8 years of schooling serving as the reference group. English proficiency is also dummy coded, with the ability to speak English "not well" or "not at all" serving as the reference category and ability to speak English "well" or "very well" coded as "1". In this analysis, age is a continuous variable. Marriage may contribute to the likelihood of self-employment, as many immigrant businesses rely on unpaid family workers and kin networks to facilitate self-employment(Light and Bonacich 1988). Marital status is defined as "married" coded as "1" and "other" serving as the reference category.

I conduct additional analyses among the foreign-born to examine the effect of length of residence in the US. I expect that as immigrants reside in the US longer, they will show a gradual convergence with the self-employment rates of the dominant group. By comparing three different length of residence groups, this regression will illustrate the direction of the changes in self-employment rates within a group.

Length of residence in the US is correlated with age; as time since migration increases, immigrants are also getting older. Age has been show to have a positive effect on self -employment for the US born (Archer, 1991; Butler and Herring, 1991). Thus, it is important to control for the effect of age when examining the effect of length of residence. Age is measured as a categorical variable in order to observe curvilinear patterns not evident when age is used as a continuous variable. Since only a very small percentage of 16-24 year olds are self-employed, this group is excluded. Men between the ages of 25-34 are the reference group in the logistic analysis. The second category includes immigrant men between the ages of 35-44 and the third category includes immigrant men between the ages of 45 and 54. Finally, the fourth category is made up of immigrant men between the ages of 55 and 64. These age groups are operationalized as dummy variables.

Length of residence in the US is defined categorically by year of immigration, for immigrants between the ages of 25 and 64, working age immigrants. The reference group are recent immigrants who arrived between 1980 and 1990. The second category includes immigrant men who immigrated to the US between 1970 and 1980 and are labeled 10-20 year residents. Lastly, the third category includes immigrant men who immigrated to the US between 1960 and 1969. This group is labeled long-term residents. The second and third groups are again operationalized as dummy variables with the first category serving as the reference group.

In this additional analysis among the foreign-born, age and length of residence are examined without human capital and married status in the equation in Model 1. Human capital variables and married status are added to Model 2.

Table 1 presents some descriptive statistics for US born whites, foreign and US born Korean and Mexican males in this sample. Large differences between these groups is evident with respect to education, English proficiency, and age. Koreans are similar to whites with respect to education, and English proficiency, while Mexicans lag behind in all human capital characteristics; although within each ethnic group there are differences between the foreign-born and the US born.

Foreign-born Mexicans are the youngest group, on average, in this sample. The average age for Mexican immigrants in this sample is 35.6, almost four years less than US born Mexicans. In contrast, the average age for whites in this sample is 41.4 years old, the oldest group. US born Koreans are similar, with an average age of 41.1 years old. Age is important for two reasons; as people get older, they are more likely to become self-employed (Archer, 1991; Butler and Herring, 1991), and as people get older, they acquire human capital such as work experience. Moreover, older people are more likely to be married, and it has been shown that married status contributes to the likelihood of self-employment (Light and Bonacich, 1988).

US born Koreans in this sample have the highest educational attainment, 62.1 percent have had 1-4 years of college and 25.9 percent have a graduate or professional degree. Foreign-born Koreans are next with 58.4 percent having at least some college and 14.7 percent have a graduate or professional degree. Whites follow with 56.5 percent having 1-4 years of college and 12.8 percent holding a graduate or professional degree. US born Mexicans lag behind with only 37.6 percent achieving 1-4 years of college and 3.1 percent holding a graduate or professional degree. Foreign born Mexicans are the least educated, 11 percent have 1-4 years of college and a mere 1.1 percent have a graduate or professional degree.

With respect to English proficiency, the US born groups are similar. Almost all whites, US born Koreans and US born Mexicans speak English "well" or "very well". Foreign-born Koreans are more likely to speak English better than Mexican immigrants.

Whites have the highest rate of marriage among the US born groups (63.5 percent), while Koreans have the lowest rate (58.6 percent). Foreign-born Koreans are more likely to be married (82.8 percent) while a substantially smaller percentage of Mexicans are married (61.0 percent).

** insert Table 1 here **

The between and within group differences in human capital characteristics may partially explain differences in self-employment, thus these variables are included in the multivariate analysis. Married status and age are not human capital variables but are also included in the analysis since Koreans and Mexicans differ along these characteristics and may contribute to the likelihood of self-employment (Light and Bonacich, 1988; Portes and Zhou, 1992). I now turn to the multivariate logistic regression analysis of self-employment and will conclude with a discussion of the findings.

In Table 2, a logistic regression analysis shows effects of ethnicity and nativity on self-employment among five groups: US born and foreign-born Korean and Mexican men and US born whites. The foreign-born groups include Korean or Mexican immigrant men who immigrated to the US between 1960 and 1990 and are 25 to 64 years old. The US born groups include Korean, Mexican, or White men ages 25 to 64. The Korean and Mexican groups are operationalized as dummy variables while the White group serves as the reference category.

**insert Table 2 here**

In Table 2, Model 2 illustrates the effects of nativity and human capital variables and married status on self-employment outcomes. Education contributes significantly to the likelihood of self-employment for those with 1 to 4 years of college or a graduate or professional degree. Men with 1 to 4 years of college are over one and a half times more likely to be self-employed than the least educated, and this decreases slightly for those with a graduate or professional degree. Additionally, the significant coefficients for the effects of English, age, and married status illustrate that men who are married, older, or speak English "well" or "very well" are more likely to be self-employed.

Model 1 illustrates significant effects of nativity and ethnicity on self-employment. While foreign-born Koreans are over three times more likely to enter into self-employment than whites, foreign-born Mexicans are less than half as likely to do so. Korean immigrant entrepreneurship surpasses that of whites, while Mexican immigrant entrepreneurship lags far behind. According to the assimilation argument, as immigrants and their descendants accumulate skills and knowledge of the host society, they should begin to show gradual convergence with the dominant cultural group. Assimilation is a gradual, multi-generational process; however, this analysis shows a small part of this process. US born Korean and Mexican self-employment rates should more closely reflect that of whites than the foreign-born. US born self-employment should be substantially lower for Koreans than their foreign-born counterparts as they assimilate, while US born Mexican self-employment should increase to levels closer to whites. Interestingly, results in Table 2 support this hypothesis for Koreans but not Mexicans. The coefficients among US born Korean men are not significant -- the rates of self-employment among US born Korean men do not differ significantly from the self-employment of whites. This indicates that economic assimilation has occurred among US born Koreans, with respect to self-employment, as assimilation theory would predict. Foreign-born Koreans are almost three and a half times as likely to be self-employed than whites.

Interestingly, nativity among Mexicans has a converse effect. In Model 1, The large, significant coefficient for the effects of nativity on self-employment indicate that Mexican self-employment differs markedly from that of whites. Foreign-born Mexican men are a third as likely to be self-employed as whites, however convergence does not occur among US born Mexicans.

This analysis has demonstrated that the self-employment rates of foreign and US born Korean males shows some convergence with self-employment rates of whites. The introduction of human capital, married status and age slightly increases the coefficients on nativity and ethnicity -- with the inclusion of these variables, rates of self-employment for all groups does not change the convergence trends. For Koreans, rates of self-employment among the US born are similar to whites as assimilation theory would predict. Among foreign and US born Mexicans, predictions of assimilation are not well supported.

In order to further assess differences between the foreign-born groups and to observe gradual changes in self-employment rates among the foreign-born groups, I focus on length of residence. I consider whether the self-employment rates of foreign-born Korean and Mexican males change over time. If assimilation is gradually occurring with respect to self-employment, length of residence should have some effect on rates of self-employment.

Length of Residence on Self-Employment

In this analysis, I examine the effects of age and length of residence on self-employment separately for Korean and Mexican immigrant men, in order to demonstrate changes in the direction of self-employment rates as immigrants reside in the US longer. In addition, the relationship between age and length of residence on self-employment among Koreans is explored in Table 3. The coefficient for the effect of age shows that as Koreans get older, they are significantly more likely to become self-employed. Koreans ages 35 to 44 are two and a half times as likely to be self-employed than Koreans aged 25 to 34 (the reference group) and almost three times as likely if they are ages 45 to 54. A curvilinear effect is apparent since there is a slight decrease in the likelihood of self-employment among Koreans who are 55 to 64. While self-employment does increase with age, the largest difference is between the very youngest group and all other age groups. The accumulation of skills, knowledge, and capital explain some of the increase in self-employment as Koreans get older.

In Table 3, Model 2 introduces human capital variables and married status to the equation. Education and English proficiency are not shown to significantly increase the likelihood of self-employment among this highly educated group. The effect of married status is significant -- married Koreans are twice as likely to be self-employed than unmarried Koreans. The inclusion of human capital variables and married status into the equation result in no changes in the effects of length of residence for this group. Although these variables partially explain self-employment, the main effects of length of residence and age, do not disappear.

**insert Table 3 here**

Assimilation theory would predict that over length of stay, self-employment rates of Korean immigrants should show a gradual decrease in the likelihood of self-employment. Evidence in support of assimilation theory's prediction is found in this analysis. The significant coefficient for 10 - 20 year residents shows that Koreans who arrived in the US between 1970 and 1980 are significantly more likely to be self-employed than recently arrived immigrants. However, long-time residents do not differ markedly from recently arrived immigrants. This does lend evidence for assimilation with respect to self-employment. Self-employment increased for those 10 - 20 year residents, immigrants who came to this country between 1970 and 1980, but not for long-term residents, those that came between 1960 and 1970. This shows that self-employment rates decrease as Korean immigrants reside in the US longer, which is consistent with assimilation theory.

This analysis is also conducted on foreign-born Mexican men in Table 4. The addition of human capital variables in Model 2 increases the effects of age on self-employment, but shows no change with respect to length of residence on self-employment. Mexicans with a graduate or professional degree are two and a half times as likely to be self-employed than immigrants with an eighth grade education or less (the reference group). Knowledge of English also significantly contributes to the likelihood of self-employment. The accumulation of skills (education) and knowledge of English, as Mexicans age contributes slightly to self-employment among this group, however, the effects of length of residence do not disappear.

Age significantly contributes to the likelihood of self-employment. As Mexicans get older, they are more likely to be self-employed. Mexicans ages 35 to 44 are over one and a half times more likely to be self-employed and Mexicans ages 45 to 64 are twice as likely to be self-employed than the reference group.

**insert Table 4 here**

The significant coefficient for 10 to 20 year residents and long-term residents implies that the likelihood of self-employment increases significantly as length of residence in the US increases. This is consistent with assimilation theory, which would predict that as Mexican immigrants reside in the US longer, rates of self-employment would begin to show a gradual increase. As foreign-born Mexicans reside in the US longer, there is a gradual increase in their self-employment rate.

In considering self-employment rates as an indicator of assimilation, I predict self-employment rates of US born and foreign-born ethnics will gradually converge or to the self-employment rates of whites, the dominant cultural group. Although this is a multi-generational process, as convergence of immigrants and their descendants with respect to a number of indicators may take place over many generations (Lieberson, 1963:10; Rose, 1993:191), I argue an analysis of foreign and US born ethnics may hint at this process. In this paper, self-employment is used as an indicator of socio-economic assimilation. In Table 2, my findings show that assimilation with respect to self-employment appears to occur among US born Koreans. Assimilation theory's predictions are not well supported for US born Mexicans, in other words, as far as participation in business ownership, US born Mexicans have not been as successful in entering the capitalist class in the US.

Given that assimilation processes take place over many generations, assimilation theory would predict that self-employment rates change slowly and gradually, as length of residence increases among immigrants. By comparing changes in the self-employment rates of immigrants over length of residence, some of the gradual process of convergence is noticeable. As shown in Tables 3 and 4, rates of self-employment decrease over length of residence among Koreans, and increase among Mexicans, which is in keeping with assimilation theory.

My findings indicate that US born Korean males assimilate with respect to self-employment, while US born Mexicans do not. Among immigrants, convergence is observed as foreign-born Koreans decrease and Mexicans increase in their rates of self-employment as immigrants reside in the US longer. Although self-employment rates are partially explained by the predictions of assimilation theory with the factors considered here -- nativity and ethnicity on self-employment, the inclusion of human capital variables and married status, along with a consideration of length of residence for immigrants -- a consideration of the context of the immigrant and ethnic group experience itself, within the context of the US economic structure is necessary in order to fully explain the self-employment rates of Koreans and Mexicans in Los Angeles.

Ethnic self-employment may provide the means to achieve economic mobility for groups not readily integrated into the general economy. This is true for US born as well as foreign-born groups. Among US born Mexicans, however, it can be argued that low levels of human capital, few class and ethnic resources and a social network of secondary wage labor has provided few opportunities to engage in self-employment as an avenue of upward mobility. The opportunity structure open to US born Mexicans may hinder self-employment, as this group has historically been perceived as a low wage labor pool relegated to the secondary sector of the labor market. US born Mexicans face limited opportunities to advance as workers in the general economy, and as a result, have not been able to acquire the resources necessary to establish a firm entrepreneurial base from which to grow. The capitalist class is not as open to Mexicans, because their labor power in the US economy is needed in the secondary sector of the economy.

Although it has been argued that Mexicans have low rates of self-employment, this research paper shows that as length of stay increases, self-employment for foreign-born Mexicans increases to such a degree that after approximately 30 years in the US, self-employment represents almost 9% of the Mexican immigrant workforce in this sample. The assimilation perspective predicts that as skills and knowledge of the host society are acquired, immigrants will begin to reflect the rates of self-employment for the US born population. The increase in self-employment as length of stay increases supports assimilation's predictions. Upon arrival, few immigrants have the skills and resources necessary to engage in self-employment, much like their US born counterparts. However, as sojourners become permanent residents and blocked mobility in the primary and secondary sectors of the labor market is realized, and skills important to the host society are accumulated, the self-employment rate of the foreign-born increases dramatically. Among Mexican immigrants, unequal returns in the primary and secondary sectors of the general economy, economic restructuring including the decrease in good mid-level jobs while at the same time providing an increase in new market demands, make self-employment not only a possible avenue of economic mobility, but a necessity, in order to secure material well-being. Self-employment becomes a "survival" technique (Portes and Rumbaut, 1990:87).

The processes of assimilation with respect to self-employment are clear in the comparison of foreign and US born Koreans in Table 2. Here, it is clear that the self-employment rates of US born Koreans have indeed converged with that of whites. US born Koreans are similar to whites with respect to self-employment rates and human capital characteristics. US born Koreans have integrated into the general labor market and do not need to exercise self-employment to the extent that foreign-born Koreans do. Foreign-born Koreans, in contrast, engage in self-employment upon arrival in above average numbers. However, over length of stay, Korean immigrants show a gradual decrease in self-employment rates, as illustrated in Table 3. This supports assimilation theory.

Foreign-born Koreans represent a select group: they are highly educated, often managers and professionals in Korea before immigrating to the US (Light and Bonacich, 1988). Government reforms in immigration policy in 1965 led to an increase in Korean immigration, partially fulfilling a need for highly educated and technical workers in the US. Group and individual characteristics such as prior education, knowledge of business and managerial skills, and the permanent residency status of many translates into Korean businesses in the US (Light and Bonacich, 1988). Self-employment arises as an opportunity for economic mobility, and Koreans have the class and ethnic resources necessary to establish them. Interestingly, married status significantly contributes to self-employment as illustrated in Table 3, Model 2. This hints the importance of kin/family networks, ethnic resources which contribute to successful entrepreneurship (Light and Bonacich, 1988).

In conclusion, it is apparent that differences in the self-employment rates of Koreans and Mexicans can be understood by a consideration of the predictions of assimilation theory and ethnic group membership characteristics, as explained by the literature on ethnic entrepreneurship. US born Koreans have assimilated economically, with respect to self-employment, while US born Mexicans have not. Foreign-born Koreans enter into self-employment in large numbers upon arrival, the result of ethnic and class resources as well as social networks that facilitate entry into self-employment. Over time, the need of this group to engage in self-employment decreases, as opportunities for this highly skilled group open up in the general labor market. Self-employment rates among foreign-born Mexicans is very low at the outset, the result of limited skills and knowledge and class and ethnic resources which can be used to facilitate self-employment. As length of residence increases, limited opportunities the result of blocked mobility and discrimination in the secondary sector of the general economy, push these immigrants into self-employment as a survival technique (Portes and Rumbaut, 1990), and into the working class.

This paper provides evidence for the consideration of assimilation theory in understanding ethnic self-employment differences. Assimilation theory predicts that the self-employment rates of ethnic groups converge with the dominant cultural group. The findings presented in this paper lend evidence to the predictions of this theory for US born Koreans and foreign-born Koreans and Mexicans. Ethnic group differences in self-employment have been explained in the ethnic entrepreneurship literature thus far with individual characteristics such as human capital attainments, and group specific characteristics such as class and ethnic resources, as well as structural constraints and opportunities faced by the incorporation of an ethnic group into the host society (Portes and Rumbaut, 1990). The synthesis of these two literatures, within the context of the US capitalist economy, provides a fuller, more accurate account of ethnic differences in self-employment.

% Self-Employed: 17.6 39.6 7.8 6.9 15.6

% 8 or less 3.5 3.9 8.3 54.8 1.9

% 9-11 1.7 1.9 15.5 14.3 5.4

% Highschool 6.9 21.0 35.5 18.8 23.5

%1-4 yrs. college 62.1 58.4 37.6 11.0 56.4

% Grad/Prof 25.9 14.7 3.1 1.1 12.8

%Speak English "well"

or "very well": 98.0 64.0 96.0 49.0 99.0

Age: 38.0 41.1 39.3 35.6 41.4

% Married: 58.6 82.8 61.0 70.8 63.5

1960-1969 na^a 5.8 na 15.7 na

1970-1979 na 36.5 na 43.9 na

1980-1990 na 57.7 na 40.5 na

(Unweighted N): 58 2,288 13,949 25,546 97,220

b odds b odds